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Answering Landlord and Real Estate Investor Questions Regarding Michigan Executive Orders

Last updated April 2, 2020 @ 4:24 p.m.

This post will be updated as more information becomes available. As a reminder, RPOA staff is still available to assist members over the phone during this time. RPOA members please call (616) 454-3385 if you have any questions.

 

 

Q. Can I do yard cleanup at my rentals, send out an employee or my lawn care service to do this type of work?

A. Apparently not. While the Governor’s office says that providing housing is part of the critical infrastructure, apparently doing yard work is not part of that provision. The RPOA office has received numerous reports of local police or other enforcement departments that have ordered those doing this type of work at properties other than their own personal residence to stop and go home. We are also assuming, at this time, that lawn mowing will also not be allowed. Let’s just hope this doesn’t last so long that we have to find out.

Q. Can I repair damages or broken items in a rental?

A. A qualified, yes. If the items in disrepair would impair the life, health and safety of your residents, you may do the work or your contractors may do the work. So far, it seems this would include ensuring that water, electrical, H/VAC, waste disposal, and cooking facilities and services are in working order. One has to assume that anything endangering the structural integrity of the building would also be included on this list. However, one member reported that he was working on a roof and was told by the police to stop and go home. Here’s what the state has specifically said about this issue: “Under the order, critical infrastructure workers include workers “who provide services that are necessary to maintaining the safety, sanitation, and essential operation of residences.” To the extent your workers perform jobs that are necessary to the safety, sanitation, and operation of homes, they may be designated as critical infrastructure workers.”

Q. Can I show rentals to prospective tenants?

A. No.

Q. Can I do what is necessary to lease a unit and move in a new tenant?

A. A qualified, yes. The Governor’s office indicates that housing is part of the critical infrastructure and keeping people housed is a priority. So, yes, you can lease and move in a new tenant. However, as much of this work should be done remotely and with the fewest amount of people possible, avoiding in-person interactions with tenants.

Q. Can I do what is necessary to move a tenant out?

A. A qualified, yes. As long as the move-out is necessary for the tenant to secure and maintain their housing. However, as much of this work should be done remotely and with the fewest amount of people possible, avoiding in-person interactions with tenants.

Q. Can I evict a tenant?

A. Yes and no. The State Court Administrators Office (SCAO) confirmed with the RPOA yesterday that evictions can move forward for the following reasons:

  • Drug activity.
  • Immediate threats to the health and safety of the residents (read this to mean, the unit has been made uninhabitable by the tenant or other circumstances).
  • The tenant has committed or has threatened to commit bodily harm.

 
That’s it. No evictions for non-payment of rent, non-payment of utilities, or any other violation of the lease—including holding over (the tenant did not move out at the end of the lease). You may send a notice for any of the above issues and file a complaint in court. You’ll need to contact the district court to determine how they wish you to file the complaint. You’ll most likely need to do this via the mail or email. If you do not get a response from the court or the court appears to be putting up a roadblock for these allowable evictions, contact SCAO at (517) 373-0128. Members are encouraged to contact one of the RPOA’s referral attorneys to get assistance as necessary.

Q. Can I evict a tenant for non-payment of rent or utilities?

A. The short answer is no. However, this doesn’t mean the tenant does not still owe you for past due rent or utilities. RPOA referral attorneys are advising members to send notices for non-payment of rent, understanding that a complaint may not be filed until further notice. (The current eviction moratorium is set to end on April 17, 2020 at 11:59 p.m.…but, just guessing, this will be extended by several weeks.) As of March 26, 2020, “The Coronavirus Aid, Relief, and Economic Security Act” has not yet been passed by the House and signed by the President—however this is expected to happen on March 27. Once it does pass additional restrictions on evictions will go into place for some rental properties, i.e. For 120 days beginning on the date of enactment, landlords are prohibited from initiating legal action to recover possession of a rental unit or to charge fees, penalties, or other charges to the tenant related to such nonpayment of rent where the landlord’s mortgage on that property is insured, guaranteed, supplemented, protected, or assisted in any way by HUD, Fannie Mae, Freddie Mac, the rural housing voucher program, or the Violence Against Women Act of 1994.

Q. What if I have a writ already but haven’t yet put the tenant out? Can I still do that?

A. If for the reasons noted above, yes. (Keep in mind though that some local police department’s may not be up to speed on what evictions can and can’t be done. So, don’t be surprised if you get challenged on this.) For anything else, I think the “stay at home” rules apply…so, as far as we understand it, no you can’t execute a writ for any other reason.

Q. What is the RPOA’s position on reduced and/or deferring rent?

A. With record numbers of unemployed people and with deep losses of income for many workers, it is inevitable tenants will face issues with paying rent—if not come April 1, at least by May 1. While every rental property owner and management company must make their own decisions taking into account their financial situation, the RPOA is encouraging members to seek a way to soften the impact of upcoming rental payments and attempt to avoid future evictions. One way of doing this would be to simply to discount the rent temporarily. However, the RPOA would suggest, for those tenants facing an employment/income hardship, that deferring part of the rent until a future date would be a better approach. In other words, reduce the rent now and add it to future rent payments. Getting a little money now is better than nothing and not letting the tenant off the hook for the full rental amount is just good sound business sense.

Q. Is the RPOA doing anything at the state level to soften the blow for landlords?

A. Yes. The RPOA has now participated in two meetings with the Governor’s office and other state agencies to deal with the non-payment crisis and the moratorium on evictions. The administration is sensitive to the blight of the landlord and understands that a lack of rental income will impact the security of housing for everyone and severely impact landlords’ personal finances…especially those landlords and property management companies relying exclusively on rental income to support their livelihoods. Several options have been put on the table as solutions. Most rely on assistance that should be coming to the State of Michigan from the federal government under the “The Coronavirus Aid, Relief, and Economic Security Act.” The state is expected to receive just over $100 million to address housing needs and provide rental assistance. The objective as discussed is to prevent non-payment of rent issues upstream of the court system. The most probably solution at this time would be a mechanism whereby rental property owners/management companies would file an affidavit once a tenant is behind a certain number of days in rent. Once verified, payment for the past due rent would go directly to the landlord. Further action on this solution is expected at a meeting the week of March 30.

Q. Will I ultimately be able to collect unpaid rent?

A. Currently, the answer is yes. The executive order states that “nothing in this order shall be construed to abrogate the obligation to pay or right to receive payment due under a lease…” At some point in the future, you’ll be able to go to court. Keep in mind though, it could take months to go through the backlog of eviction cases.

Q. Can I do other business activities that are not specific to repairs or moving a tenant in or out of a rental unit?

A. No. Any other activity, as it has been explained to us, is not a critical function of providing housing. As of the evening of March 26, the Governor’s office reiterated its order with the following: “The order must be construed broadly to prohibit in-person work that is not necessary to sustain or protect life. In close or doubtful cases, employers should not designate workers for in-person work.” The police and prosecutors have been instructed to enforce this aggressively. In short, employees, landlords and managers can still work from home. This extends to the RPOA staff. The RPOA is still open for business but staff is working from home and doing the best it can to service members’ needs.

Q. Can I go to my rental property to deal with disturbances that are impacting other tenants?

A. We are going to take a wild guess that the answer to that question is no. Call the police if things seem to be getting out of hand. If tenants seem to be interacting with one another, remind them (via email, text of phone) that they are not supposed to be doing so unless they are six feet away and outside doing allowable activities, i.e. running, walking, biking, walking the dog.

Q. Will my trash removal service to be operating?

A. Yes…sanitation activities are allowed.

Q. Can I show a property to a prospective buyer?

A. No.

Q: Is construction allowed under the executive order?

A: Some limited forms of construction are permissible, including construction to maintain and improve essential public works like roads, bridges, the telecommunications infrastructure, and public health infrastructure. Construction workers may also undertake such projects as necessary to maintain and improve the safety, sanitation, and essential operations of residences. In addition, businesses may designate construction firms to provide necessary support to the work of the businesses’ critical infrastructure workers. All construction work that is carried out while the order is in effect must be done in accordance with the mitigation measures required under section 5(c) of the order.

Q: Are people who repair homes considered critical infrastructure employees for the purposes of Executive Order 2020-21?

A: In general, yes. Under the order, critical infrastructure workers include workers “who provide services that are necessary to maintaining the safety, sanitation, and essential operation of residences.” To the extent your workers perform jobs that are necessary to the safety, sanitation, and operation of homes, they may be designated as critical infrastructure workers.

Q: Will my certification be extended if there isn’t a refresher course available for me to take before my recertification date is up?

A: At this time, we are not aware of any notification from the EPA on this issue. We recommend that those in this situation contact the EPA and ask this question and for clarification. The RPOA plans to resumes it’s refresher courses in June—all RRP courses have been cancelled for April and May.

The RRP refresher course is available online. You can find more information about online refresher courses here.

 

 

Governor Whitmer Signs Executive Order Protecting Workers Who Stay Home, Stay Safe When They or Their Close Contacts Are Sick

Today, Governor Gretchen Whitmer signed Executive Order 2020-36, prohibiting all employers from discharging, disciplining, or otherwise retaliating against an employee for staying home from work if they or one of their close contacts tests positive for COVID-19 or has symptoms of the disease. Executive Order 2020-36 also strengthens the governor’s “Stay Home, Stay Safe” executive order by declaring that it is the public policy of the state that all Michiganders who test positive or show symptoms, or who live with someone who tests positive or shows symptoms, should not leave their homes unless absolutely necessary.

Executive Order 2020-36 takes effect immediately and will remain in place until the end of the governor’s declared emergency or until otherwise rescinded.

“People who are prioritizing the health and safety of their families, neighbors, and loved ones during this crisis should not be punished by their workplace. Staying home and staying safe is one of the most important things we can do to mitigate the spread of COVID-19 in Michigan, and this executive order will ensure more people can do so without facing discrimination from their workplace,” said Governor Whitmer. “We have taken aggressive measures to protect our communities, but it’s on all of us to work together to fight this virus.”

“Ensuring those who experience symptoms or test positive for COVID-19 and the people they live with remain in their homes will help mitigate community spread,” said MDHHS Chief Deputy for Health and Chief Medical Executive Dr. Joneigh Khaldun. “It’s crucial that anyone experiencing symptoms, and those they live with, stay home and stay safe.”

Under Executive Order 2020-36, any and all individuals who test positive for COVID-19 or who display one or more of the principal symptoms, such as fever, atypical cough, and atypical shortness of breath, must remain in their home or place of residence. This includes Michiganders who are otherwise free to leave their homes under Executive Order 2020-21. People who test positive or who are experiencing symptoms must wait to leave their homes until three days have passed since their symptoms have resolved and seven days have passed since symptoms first appeared, or since they were swabbed for the test that yielded the positive result.

In addition, any and all close contacts of a symptomatic individual or of someone who has tested positive for COVID-19 should remain in their home until 14 days have passed or the symptomatic individual receives a negative COVID-19 test.

Health-care professionals, workers at a health-care facility, first responders (e.g., police officers, fire fighters, paramedics), child protective service employees, workers at child caring institutions and correctional officers are exempt from staying at home if a member of their household tests positive for COVID-19 or displays one or more of the principal symptoms provided that their employers’ rules governing occupational health allow them to go to work.

Individuals and household members who test positive for COVID-19 or who display one or more of the principal symptoms may leave their home or place of residence when necessary to obtain food, medicine, or supplies that are needed to sustain or protect life and when those items cannot be obtained via delivery. People may also engage in outdoor activities, including walking, hiking, running, cycling, or any other recreational activity consistent while remaining at least six feet from people from outside the individual’s household.

When symptomatic people or their close contacts leave the home, they should wear some form of covering over their nose and mouth, such as a homemade mask, scarf, bandana, or handkerchief. For now, however, supplies of N95 masks and surgical masks should generally be reserved to health-care professionals, first responders (e.g., police officers, fire fighters, paramedics), and other critical workers.

Information around this outbreak is changing rapidly. The latest information is available here.

To view executive order 2020-36 and for a flow chart to help Michiganders understand when they should stay home, click the links below:

COVID-19 When is it Safe to Leave Home

EO 2020-36

 

 

Updates on City of Grand Rapids Rental Housing Enforcement During Virus Lockdown

This morning at 10:00 a.m., the RPOA was informed that the City of Grand Rapids will continue to enforce outside and interior violations where they pose a health and safety concern. In the answer to what that might include from an exterior point of view, the city noted some of the following:

  • Bags of trash.
  • Chipped paint on the ground.
  • Broken windows.
  • Damaged roofs that may cause structural damage or where it is causing leaks into the property.
  • Piles of brush, wood, etc. that might harbor rodents.
  • Overgrown shrubs or trees blocking sidewalks.

 

What the city noted was not considered an immediate concern (at least not yet) are leaves and tall grass. The city also acknowledged that the Governor’s executive order specifically states no landscaping work.

As for interior violations, the city is relying on tenants to file complaints and will follow up on them where they are deemed to be a health and safety concern.

The RPOA confirmed with the city that the police department and the prosecutor’s office are aware of this policy and will not penalize landlords and managers for addressing conditions as noted above. Of course, any work should be done following the guidance of safe work practices for lead and those stipulated to avoid spreading the virus. Some deferrals are being made for those that believe the work to address certain issues would compromise their health (such as senior citizens or others with comprised health issues).

The city encouraged landlords and managers or maintenance companies to contact them if they have questions about whether or not a specific issue or condition warrants addressing under executive orders and to discuss deferment if that seems appropriate. The phone number to call is (616) 456-3053. Some updates are also being posted on the city’s website.

Rental certifications are currently on hold and no date was given for when they might resume.

The RPOA will remain in contact with the Grand Rapids city inspection and enforcement department and provide any updates as necessary. As for other cities, the RPOA recommends contacting them individually to determine how they are handling the same issues. Each community seems to be taking a different approach.

 

 

MSHDA To Give Landlords Some Help If Renters Aren’t Paying

Owners of housing projects financed by the Michigan State Housing Development Authority (MSHDA) could be given short-term financial relief if their tenants are unable to make rent payments during the COVID-19 health crisis.

The MSHDA Board approved a resolution granting the agency’s leader the authority to allow short-term payment relief on bond-financed MSHDA loans.

The action is geared toward helping project owners who may experience some cash flow issues due to uncollected rent, according to a memo on the action from MSHDA Acting Executive Director Gary Heidel.

Heidel wrote that many MSHDA-backed projects could see a “precipitous drop in net-rent collected” by next month due to interrupted work schedules and lost income tied to the COVID-19 crisis.

That, in turn, “could have a devastating effect on the operations of a development,” he wrote.

The relief could extend up to 12 months, begin any time up through June 1, 2021 and be granted on a case-by-case basis.

MSHDA spokesperson Katie Bach said there’s no set amount of relief set aside. “We’re not really providing any new funding. We’re just prepared to offer relief on their debt service,” she said.

The agency’s loans and operating expenses are financed through the sale of tax-exempt and taxable bonds and notes to private investors, not from state tax revenues, according to its website.

MSHDA has also communicated to its partners that “all evictions for nonpayment of rent be halted at this time,” as called for by Governor Whitmer in one of her recent executive orders.

 

 

Showings, Move-Ins/Outs, Leasing, Repairs & Nuisance Code Issues—What Landlords Need to Know

The RPOA has just received information from the Michigan Governor’s office regarding how landlords should handle various aspects of their operation under the current “stay at home” executive order. In a nutshell, any essential activity necessary to provide shelter or the health and safety of housing is allowable—with cautionary measures. This activity includes move-ins/outs, lease closings, repairs for items related to health and safety and nuisance code issues such as trash removal.

These activities should be carried out, when possible, remotely. Where they can’t be, cautionary measures should be practiced, such as keeping your distance from others and limiting the number of people involved to the greatest extent possible and using protective wear.

Services and retailers such as moving companies and hardware stores are being allowed to continue under the same premise and cautionary advice.

What isn’t included are showings of property for lease or for sale and repairs and maintenance not related to providing safe and healthy housing. On the topic of grass mowing or other nuisance type related issues, landlords are advised to contact their local housing inspection department to ascertain where the locality stands on the issue since those may be local ordinance violations. (At this time, the RPOA has requested information regarding the City of Grand Rapids’ stance on this issue but has not yet received a response.)

With all of that said, the RPOA recommends using caution when determining what activities to engage in. Local governments may activate even more stringent “stay at home” policies and be more aggressive in their enforcement…especially in hard hit areas such as Oakland County.

Below you can find a list of questions regarding recent executive orders as they pertain to landlords and real estate investors in Michigan.

 

 

Evictions, Executive Orders and Rental Properties in Michigan

Provided by Haley Clough, Kotz Sangster Wysocki P.C., RPOA Referral Attorney (March 23, 2020)

In light of Executive No. 2020-19, which was signed by Governor Whitmer on March 20, 2020, I want to provide RPOA members with the following general advice, which is the same advice I have been giving my clients:

First, at this time there is no clear order from the federal government regarding eviction or foreclosure prohibitions. There was an announcement by President Trump regarding a stay on evictions and foreclosures–during which announcement the President referenced HUD–but we have not yet been given further guidance on this announcement from the federal government. It is relatively safe to assume that the federal government is working with HUD to stop foreclosures of HUD-based mortgages and the resulting evictions. It is also relatively safe to assume that non-payment-based evictions of HUD tenants (i.e., evictions of tenants from municipal housing commissions) are currently prohibited. However, there does not yet appear to be a mechanism in place allowing the federal government to prohibit private landlords from continuing their eviction processes as normal. What does apply to private landlords is Governor Whitmer’s Executive Order No. 2020-19.

Executive Order No. 2020-19 states in part that “no person shall remove or exclude from leased residential premises or residential premises held under a forfeited executory contract a tenant, a vendee of a forfeited executory contract, or a person holding under a tenant or vendee, except when the tenant, vendee, or person holding under them poses a substantial risk to another person or an imminent and severe risk to property…until April 17, 2020 at 11:59 p.m.” Further, “nothing in this order shall be construed to abrogate the obligation to pay or right to receive payment due under a lease…”

The purpose of this Executive Order is not to allow tenants to remain in their leased homes or units free of charge. Rather, the purpose of the Order is to allow tenants to continue to have the protection that a residential home provides from the COVID-19 pandemic, and comply with the orders to self-quarantine. At this time, landlords may of course continue to accept all rent payments tendered by their tenants. Landlords may also continue to send letters in an attempt to collect rent payments. At this time, my office is operating under the understanding that landlords may continue to issue 7-day demands to their tenants who are late on rent. However, I would encourage landlords to consider including a cover letter with any demand they send. The cover letter should state that the landlord is aware of Executive Order No. 2020-19 and is not intending the enclosed notice to constitute a demand for the tenant to immediately vacate the property. Rather, the 7-day demand is being sent with the understanding that no eviction proceeding will be formally commenced with the court until the time period set forth in Executive Order No. 2020-19 expires. To the extent that a tenant is able to pay the amount set forth in the 7-day demand, the tenant should pay as normal. The landlord can make the tenant aware that the Executive Order does not waive rent payments, which is why the Landlord is sending the 7-day demand in the usual course.

It is important to note that effective immediately, demands for payment may not be served by personal delivery. However, because the order is silent on delivery by mail, I am at this time providing the advice set forth above regarding mailing 7-day demands. Given the limited information that has been received by landlords, their attorneys, and the landlord-tenant clerks and district judges, the best we can tell is that courts are accepting eviction filings (i.e., complaints), however the courts will simply hold those filings and will issue them out in the order that they are received once the temporary stay has been lifted.

In summary, in an attempt to not be “last in line” when the temporary stay is lifted, my office is currently advising landlords to continue mailing out 7-day demands as usual, with a cover letter referencing Executive Order No. 2020-19 and the stipulations I have set forth above. If landlords are not anticipating representing themselves pro se, I would further encourage landlords to turn their eviction matters over to their respective attorneys at their usual pace. Attorneys can then send the initial case filings by mail to the court and, presumably, get the matter(s) added to the list of matters that will be formally filed once the executive order expires. In the event that my office hears from any court that we should not be mailing complaints to the court or advising our landlords to continue to send 7-day demands, we will let the RPOA know immediately. However, at this time, I would rather my clients and RPOA members err on the side of “saving their spot” on the court’s docket by continuing their processes as normal.

Finally, if RPOA members have questions, please call my direct line: (616) 552-6381. This line will be forwarded to my cell phone so I will have the ability to take calls during this time.

Editor’s Note: As clarification is made regarding evictions from a state or federal level, we will continue to provide relevant updates. The RPOA is in conversations with the Governor’s office to continue to advocate for assistance and relief for landlords. A conversation with the Governor’s office did not result in any additional updates. However, a call has been scheduled for this Thursday, March 26 to hear more from the Governor’s office on issues related to landlords. The information contained in this article is not intended to replace legal advice on any particular matter, but rather is intended only to provide general advice regarding the current understanding of Michigan’s Executive Order No. 2020-19, given the limited information and guidance currently available.”

 

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